MUMBAI – Donald Trump’s penchant for dealmaking is rubbing off on India.
The world’s fifth-largest economy is feverishly negotiating trade deals with the European Union and the UK, and is warming up to joining a China-backed bloc that it previously shunned.
The outreach will protect the South Asian country from future trade wars, even though it may benefit from the US president’s current onslaught.
Instead of retaliating against the 26 percent duty Washington slapped on its exports, India is powering ahead with talks to clinch a US trade deal that will include deepening supply chain integration.
India has an opportunity because it was hit with a lower tariff than those the White House is applying to most other Asian manufacturers including Vietnam and Bangladesh, plus key Indian exports including pharmaceuticals and IT services were spared from levies for now.
The various trade deals under active discussions, including one with the US, would cover 71 percent of the country’s exports, says Neelkanth Mishra, chief economist at Axis Bank. India’s existing pacts only cover 30 percent of its exports. The US, EU, and UK together account for more than $340 billion of India’s bilateral trade.
Yet if the US thought the trade war would pull India closer into its orbit, it may yet be disappointed. Much like China, India may opt to get closer to its neighbours in Asia.
